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Up Close and Green

Here’s a closer look at the terms and organizations that are impacting the global natural and organic marketplace.

Rachel Wright
Croda Europe
pc-europe@croda.com

The personal care market is without doubt caught up in the global whirlwind of going green. Some in the industry may say that the trend is still in its infancy, but it is by no means insignificant. In fact, it is increasing rapidly: the global natural and organic market is growing a staggering 10-15% a year, according to Organic Monitor. The global natural and organic market was valued at $8 billion in 2008, with the most developed regions being North America and Western Europe, which accounted for a significant 65% and 28% respectively. However, growth is not as strong in Asia Pacific, which has less than 3% market share.

The Interpretation of Green

With increased media activity and consumer awareness, the term green is being used in so many scenarios and, as a result, there are many different definitions. With no official definition, translation and interpretation of the meaning of green can depend on many factors, including the industry in question and the consumer’s social and environmental awareness.

In many developed markets, green claims are rising significantly, especially in Europe, a market in whichMintel data indicates that one in seven personal care products had at least one green claim, an increase from 1 in 10 during 2007. However, these claims extend beyond natural and organic to include petrochemical-free, preservative-free, locally produced, fair trade, not tested on animals, bio-degradable, sustainably sourced ingredients, recycled package and carbon neutral, to name a few.

In the Asia-Pacific region, the green market is quite diversified. Australia and New Zealand have the majority share with home grown brands such as Gaia Skin Naturals, Natures Organic and Eco Store. Natural and organic claims are less prominent in other Asian countries, as they tackle the green trend with the use of traditional natural ingredients, cold processing and recyclable and refillable packaging claims.

Green claims used across the global personal care industry can include any of the following:

Natural claims can be cited for either an individual ingredient or group of ingredients; e.g., contains 100% natural moisturizers, or for the entire formulation, especially when formulations contain between 90-100% natural ingredients. While natural claims are unregulated, formulations can also be certified natural by a number of non-government organizations, such as Germany’s BDIH or France’s Ecocert.

Organic claims can also be made either for a specific ingredient or for the entire formulation, and if desired, the formulation can be certified organic by non-government organizations. Yet many consumers do not realize that organic claims for cosmetics and personal care products fall outside EU legislation of organic labelling as they are not for human consumption.

“Free from” is a common food industry claim which is also increasingly used in the personal care industry. Free from claims have been criticized for their use in cosmetics, as they can sometimes be misleading. These claims can imply that the free from ingredient is in some way undesirable, but the undesirable attributes often lack technical data to justify this perception.
Social and ethical claims such as fair trade and not tested on animals can be perceived by consumers as green. Some of these claims are focused on preserving nature and the environment; others are concerned with assisting either the local economy or localized communities, often in remote areas.
Biodegradability claims are uncommon, but growing in popularity. According to GNPD Mintel, there were three times as many products launched with biodegradability claims in 2008 as there were in 2007. It is an area of focus for rinse-off formulations such as shower gels, shampoos and hand washes, as these products go more directly down our drains and into our ecosystem.

Carbon footprints measure the greenhouse gas emissions of a product throughout its lifecycle in order to identify areas for carbon reductions. In the UK, the Carbon Trust has been piloting a plan on a number of different products from several industry sectors. Boots’ Botanics shampoo range was one of the first in personal care to trial the concept in 2006, resulting in 20% reduction in the range’s carbon footprint.1 Since the pilot, and at the request of the project sponsors (Carbon Trust and Department for Environment, Food and Rural Affairs), the British Standards Institute developed a carbon footprint standard (PAS 2050) which, hopefully, makes carbon footprint claims more comparable and meaningful to the consumer.

In addition to carbon reduction claims, carbon neutral claims are appearing on cosmetic packs. These usually mean that the organization has offset the carbon footprint of producing the product by partaking in a project that has a positive impact on carbon emissions.

Sustainability is a keyword that is linked to being green. In general, sustainability relies on a balance between use of and replenishment of a natural resource. Qualifying exactly what constitutes sustainability is very difficult, but there are some organizations that offer raw material certification. The Forest Stewardship Council (FSC) is one of the most common certification organizations. FSC has globally certified more than 280 million acres of sustainable forest.

Packaging is another area scrutinized by green brands and there are several green options, including refillable, recyclable and biodegradable packaging.

Certification Landscape

Natural and organic content are obvious measurable parameters. Datamon- itor estimates that 9% of all personal care products launched in 2008 were marketed as being natural in some way. Moreover, 5% of product launches claimed organic content, but even these claims are not regulated, and are, from a purist’s point of view, sometimes subject to misuse. As a result, even in the regions where the green trend is booming, such as North America and Europe, there is still some confusion surrounding what constitutes green. To alleviate some of the confusion, various organizations have developed standards to which cosmetics can be certified natural, organic or environmentally friendly.

With a proliferation of certification bodies, Europe appears to be leading the way with both private and not-for-profit organizations exercising their own definitions and standards for natural and organic cosmetics. This landscape is now slightly improved with the European harmonization of six current certification bodies: Soil Association (UK), Ecocert (France), BDIH (Germany), AIAB/ICEA (Italy), BioForum (Belgium) and Cosmebio (France). These organizations launched harmonized standards called COSMOS Natural and Organic Cosmetic Standards in September. While they go someway to tackle the overcrowding of certifications, it will not completely eradicate the confusion.

Other certifications within Europe will both coexist and compete with the COSMOS standard, including the NaTrue label, established in 2008 by a European interest group consisting of natural and organic cosmetics manufacturers. NaTrue, which is aiming for a truly global standard with complete transparency, is offering a three-star approach dependent on whether the product is made from natural, natural with organic or organic ingredients. It has signed an equivalency agreement with the National Science Foundation (NSF) in North America, which means that products certified by NaTrue are also guaranteed to gain NSF approval if the product is to be extended into North America and vice-versa.

Another group of certification bodies, referred to as eco-labels, also exist in Europe. These include the Nordic Swan and EU Flower eco-label. Both focus more heavily on detergent systems and their environmental impact, in their aim to reduce water pollution, minimize waste and prevent potential risks to the environment.

Other regions are expected to look to Europe for guidance on certification and eagerly anticipate the European harmonized COSMOS standards, especially as regions such as North America and Asia-Pacific have a growing number of certifications and accreditations of their own. North America has a number of certifications for natural and organic cosmetics, including OASIS, USDA Organic and Natural Products Association. The Asia-Pacific region has the National Association for Sustainable Agriculture Australia (NASAA) and several eco-labels including the Korea program, which aims to reduce energy and resource consumption and minimize pollution in each production step.

Going Green

With so many different standards to choose from, key personal care ingredient suppliers and manufacturers of finished goods can have an influential role when it comes to adopting any of these standards. So far, ingredient suppliers’ and cosmetic manufacturers’ reactions have been mixed, especially in Europe with some manufacturers choosing not to certify with a current standard, but instead develop their own values and criteria for green.

Ingredient suppliers are also reacting in different ways; some have developed their own rating scales, while others, such as Croda, have chosen not to go down the numerous certification routes. Instead they are inviting customers to get “up close and green” with them and review their green credentials in a Green Guide that allows formulators to make selections based on the green criteria they value most. A Green Formulary also allows formulators to understand the spectrum of “greenness” that they can achieve for a variety of different formulation categories

More than Natural and Organic

While natural and organic claims are prevalent in North America and Europe, other green parameters are often considered by manufacturers, especially in Asia where going green is an energy or waste saving exercise and thoughts are more inline with the 12 Principles of Green Chemistry.2

When it comes to reducing energy input and processing costs, cold processable ingredients often provide a greener solution. For manufacturers trying to save in every aspect of the product life cycle, there are options for cold processable ingredients, which eliminate the need for high temperatures and unnecessary energy costs. These ingredients can range from emulsifiers such as Arlatone V-175, through to inorganic sunscreens such as Solaveil Clarus.

Consumer Understanding

With so many different claims being made, it is hard for the consumer to know what to look for in order to make sure they are not being “green washed”—one of the latest buzzwords being used by the industry and media to describe how some green claims may be dishonest or mislead the consumer.

There are six sins associated with green washing:3
1. The hidden trade-off—emphasizing just one environmental improvement, while possibly compromising on others.
2. No proof—no official documentation to support claims.
3. Vagueness—claims not being clear enough; for example, nothing is ever “chemical-free.”
4. Irrelevance—claims are not relevant, for example “CFC-free,” this is a requirement, not a claim.
5. Fibbing—claims are simply untrue.
6. The lesser of two evils—where a greener alternative is not necessarily better; for example, organic cigarettes.

Green washing is a growing concern throughout all industry sectors and not without reason. A recent study showed that approximately 70-80% of North American and 23-30% of Asian products are marketed in this way.4

Due to the diversity of the green trend, it is important to try and understand who the green consumers are and who they are not. Many market research companies in North America have tried to understand the various consumer groups. The Natural Marketing Institute (NMI) is a very good example. It has identified five classes of consumers in North America (Figure 1). LOHAS (Lifestyles of Health and Sustainability) accounts for 19% of the mix. They are driven by issues surrounding their health and environment and play a big role in sustaining the trend. Naturalites also account for 19%, but they are thought to be driven by personal health, more than the environment, and similar to LOHAS, they are avid users of green products. The largest segment, accounting for 25%, is the Drifters, those who are driven by the latest trends and are also sensitive to price and issues in the media. The fourth group (19%), is the Conventionals. They are driven by practicality and may partake in some green issues, such as recycling and energy conservation. Finally, the remaining 17% are the Unconcerned. Although not currently driven by green issues, these consumers may be targeted as products go into more mainstream retailers. As issues in the media and economic pressures take hold, the Drifters and the Unconcerned will threaten the strength and longevity of the green trend.

Along with strong health and environmental values held by LOHAS consumers, the study showed they value product efficacy, demonstrating that applications and/or clinical evidence is key to a product’s success. This may explain why natural deodorants and sunscreens have not taken off as fast as other personal care sectors.

Conclusion

Despite confusion regarding accreditations and certifications, the personal care industry seems united in the belief that the green trend will continue.

In regions where the trend is well established, namely North America and Europe, double digit growth is predicted for the next five years and with the harmonization of standards, green claims are expected to become more regulated and sophisticated.

In Asia, growth is likely to be led by Australia, New Zealand, Korea, Malaysia, Hong Kong, Japan, Taiwan and Singapore. Other regions, such as India and China, have recorded strong economic growth, and this, along with recent health scares such as the chromium and neodymium contamination, are likely to have a significant impact on green consumer demands. As imported brands make their presence felt within Asia, and domestic brands provide the market with knowledge and confidence, the green trend looks set to prosper.